housing authority of rayneapp1.lla.la.gov/publicreports.nsf/5cf759eb5abe1cd... · $576,718 of...

HOUSING AUTHORITY OF THE CITY OF RAYNE

REPORT ON EXAMINATION OFFINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

TWELVE MONTHS ENDED SEPTEMBER 30,2004

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date

Mike Estes, P.C.A Professional Accounting Corporation

TABLE OF CONTENTS

EXHIBIT PAGE

Independent Auditor's Report 1 - 2

Management's Discussion and Analysis 3-11

Basic Financial Statements

Balance Sheet - Enterprise Fund A 12

Statement of Revenues, Expenses, and Changesin Fund Net Assets - Enterprise Fund B 13

Statement of Cash Flows - Enterprise Fund C 14-15

Notes to the General-Purpose Financial Statements 16-26Index 16Notes to Financial Statements 17-26

Supplementary Information

Statement and Certification of Actual Modernization Cost E( 1) 27

Statement of Modernization Costs - Uncompleted E(2) 28

Report on Compliance with Requirements Applicable to EachMajor Program and Internal Control Over Compliancein Accordance with OMB Circular A-l 33 29 - 30

Report on Compliance and on Internal Control Over FinancialReporting Based on an Audit of Financial Statements Performedin Accordance with Governmental Auditing Standards 31—32

Schedule of Expenditures of Federal Awards 33

Notes to the Schedule of Expenditures of Federal Awards 34

Schedule of Findings and Questioned Costs 35 - 36

Financial Data Schedule 37 - 38

MIKE ESTES, P.O.A PROFESSIONAL ACCOUNTING CORPORATION

4200 AIRPORT FREEWAY - SUITE 100FORT WORTH, TEXAS 76117

(817)831-3553METRO (817) 654-4063

FAX (817) 831-3560 MEMBER AMERICANMIKE ESTES, CPA e-mail: [email protected] INSTITUTE OF CERTIFIED

PUBLIC ACCOUNTANTS

Independent Auditor's Report

Board of CommissionersHousing Authority of RayneRayne, Louisiana

We have audited the accompanying financial statements of the business-type activities, each majorfund, and the aggregate remaining fund information of the Housing Authority of Rayne, Louisiana asof and for the year ended September 30, 2004, which collectively comprise the Authority's basicfinancial statements as listed in the table of contents. These financial statements are the responsibilityof Rayne, Louisiana's management. Our responsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basis for ouropinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the business-type activities, each major fund, and the aggregateremaining fund information of the Housing Authority of Rayne, Louisiana, as of September 30, 2004,and the respective changes in financial position and cash flows, where applicable, thereof for the yearthen ended in conformity with accounting principles generally accepted in the United States ofAmerica.

As described in Note 1 to the basic financial statements, the Authority adopted the provisions ofGovernmental Accounting Standards Board Statement No. 34, Basic Financial Statements — andManagement's Discussion and Analysis - For State and Local Governments; Statement No. 37, BasicFinancial Statements - and Management's Discussion and Analysis - for State and LocalGovernments: Omnibus; and Statement No. 38, Certain Financial Statement Note Disclosures. Thisresults in a change in the format and content of the basic financial statements.

In accordance with Government Auditing Standards, we have also issued our report dated January 14,2005, on our consideration of the Housing Authority of Rayne, Louisiana's internal control overfinancial reporting and on our tests of its compliance with certain provisions of laws, regulations,contracts, and grant agreements and other matters. The purpose of that report is to describe the scopeof our testing of internal control over financial reporting and compliance and the results of that testing,and not to provide an opinion on the internal control over financial reporting or on compliance. Thatreport is an integral part of an audit performed in accordance with Government Auditing Standards andshould be considered in assessing the results of our audit.

The Management's Discussion and Analysis listed in the table of contents is not a required part of thebasic financial statements but is supplementary information required by accounting principlesgenerally accepted in the United States of America. We have applied certain limited procedures,which consisted principally of inquiries of management regarding the methods of measurement andpresentation of the supplementary information. However, we did not audit the information and expressno opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the Housing Authority of Rayne, Louisiana's basic financial statements. Theaccompanying Schedule of Expenditures of Federal Awards and other supplementary information ispresented for purposes of additional analysis as required by U.S. Office of Management and BudgetCircular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not arequired part of the basic financial statements of the Housing Authority of Rayne, Louisiana. Suchinformation has been subjected to the auditing procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financialstatements taken as a whole.

The accompanying Financial Data Schedules required by HUD are presented for purposes ofadditional analysis and are not a required part of the general purpose financial statements. Suchinformation has been subjected to the auditing procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects in relation to the basic financialstatements taken as a whole.

Mike Estes, P.C.Fort Worth, TexasJanuary 14, 2005

HOUSING AUTHORITY OF RAYNE, LOUISIANA

REQUIRED SUPPLEMENTAL INFORMATION

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

SEPTEMBER 30, 2004

Housing Authority of Rayne, Louisiana

Management's Discussion and Analysis (MD&A)September 30, 2004

The management of the Housing Authority of Rayne, Louisiana presents the following discussion andanalysis of the Housing Authority's financial activities for the fiscal year ending September 30, 2004. Thisrepresents an overview of financial information. Please read this discussion and analysis in conjunctionwith the Authority's audited financial statements, which follows.

FINANCIAL HIGHLIGHTS

The Housing Authority's assets exceeded its liabilities by $3,087,261 at the close of the fiscalyear ended 2004.

•/ Of this amount, $688,502 of unrestricted assets may be used to meet the HousingAuthority's ongoing obligations to citizens and creditors. This amount equals 79% of thetotal operating expenses for the fiscal year 2004, which means the Authority couldoperate about 9 months using the unrestricted assets alone.

V The remainder of $2,398,759 represents a restriction equal to the net amount invested inland, building, furnishings, leasehold improvements, equipment, and construction inprogress.

* The Housing Authority's total net assets increased by $181,405, a 6% change from the priorfiscal year 2003. This increase is attributable to the investment in capital assets andconstruction in progress of HUD contributions in excess of operating expenses, described inmore detail below.

* The Authority spent $43,630 on significant capital asset additions and $381,141 onconstruction in progress for central heating and air conditioning; remodeling bathrooms,flooring, and walls; and installation of new roofs. As a result, the Authority was able to place$576,718 of capital assets into service during the current year.

* The Housing Authority continues to operate without the need for debt borrowing.

OVERVIEW OF THE FINANCIAL STATEMENTS

This MD&A is intended to serve as an introduction to the Housing Authority's basic financial statements.The Housing Authority is a special-purpose government engaged in business-type activities. Accordingly,only fund financial statements are presented as the basic financial statements, comprised of twocomponents: (1) fund financial statements and (2) a series of notes to the financial statements. Theseprovide information about the activities of the Housing Authority as a whole and present a longer-termview of the Housing Authority's finances. This report also contains other supplemental information inaddition to the basic financial statements themselves demonstrating how projects funded by HUD havebeen completed.

Reporting on the Housing Authority as a Whole

One of the most important questions asked about the Authority's finances is, "Is the Housing Authority asa whole better off, or worse off, as a result of the achievements of fiscal year 2004?" The Statement ofNet Assets and the Statement of Revenues, Expenses, and Changes in Net Assets report informationabout the Housing Authority as a whole and about its activities in a way that helps answer this question.These statements include all assets and liabilities using the accrual basis of accounting, which is similar



to the accounting used by most private-sector companies. All of the current year's revenues andexpenses are taken into account regardless of when cash is received or paid.

Fund Financial Statements

All of the funds of the Housing Authority are reported as proprietary funds. A fund is a grouping of relatedaccounts that is used to maintain control over resources that have been segregated for specific activitiesor objectives. The Housing Authority, like other enterprises operated by state and local governments,uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

The Housing Authority's financial statements report its net assets and changes in them. One can think ofthe Housing Authority's net assets - the difference between assets and liabilities - as one way tomeasure the Authority's financial health, or financial position. Over time, increases and decreases in theAuthority's net assets are one indicator of whether its financial health is improving or deteriorating. Onewill need to consider other non-financial factors, however, such as the changes in the Authority'soccupancy levels or its legal obligations to HUD, to assess the overall health of the Housing Authority.

USING THIS ANNUAL REPORT

The Housing Authority's annual report consists of financial statements that show combined informationabout the Housing Authority's most significant funds, the Low Rent Housing Program and Public HousingCapital Fund Program.

The Housing Authority's auditors provided assurance in their independent auditors' report, locatedimmediately preceding the MD&A, that the basic financial statements are fairly stated. The auditorsprovide varying degrees of assurance regarding the other information included in this report. A user ofthis report should read the independent auditors' report carefully to determine the level of assuranceprovided for each of the other parts of this report.

Reporting the Housing Authority's Most Significant Funds

The Housing Authority's financial statements provide detailed information about the most significantfunds. Some funds are required to be established by the Department of Housing and UrbanDevelopment (HUD). However, the Housing Authority establishes other funds to help it control andmanage money for particular purposes, or to show that it is meeting legal responsibilities for using grantsand other money.

The Housing Authority's enterprise funds use the following accounting approach for Proprietary funds: Allof the Housing Authority's services are reported in enterprise funds. The focus of proprietary funds is onincome measurement, which, together with the maintenance of net assets, is an important financialindicator.

Housing Authority of Rayne, LouisianaManagement's Discussion and Analysis (MD&A)

September 30, 2004

FINANCIAL ANALYSIS

The Housing Authority's net assets were $3,087,261 as of June 30, 2004. Of this amount, $2,398,759was invested in capital assets, and the remaining $688,502 was unrestricted. No other specific Assetsare restricted. Also, there are no other restrictions on general Net Assets.

CONDENSED FINANCIAL STATEMENTS

Condensed Balance SheetAs of September 30,2004

ASSETSCurrent Assets $ 750,645Capital Assets, Net of Depreciation 2,398.759

Total Assets 3.149,404

LIABILITIESCurrent Liabilities 47,139Non-Current Liabilities 15,004

Total Liabilities 62,143

NET ASSETSInvested in Capital Assets 2,398,759Unrestricted 688,502

Total Net Assets 3,087,261

Total Liabilities and Net Assets 3,149,404



CONDENSED FINANCIAL STATEMENTS (Continued)

The net assets of these funds increased by $181,405, or by 6%, from those of fiscal year 2003, asexplained below. In the narrative that follows, the detail factors causing this change are discussed:

Condensed Statement of Revenues, Expenses,and Changes in Fund Net Assets

Fiscal Year Ended September 30, 2004

OPERATING REVENUESRental Revenue $ 368,675Other Tenant Revenue 97,384

Total Operating Revenues $466.059

OPERATING EXPENSESAdministration 226,980Tenant Services 2,742Utilities 126,409Protective ServicesOrdinary maintenance and operations 179,514General and Other 115,504Depreciation 218.622

Total Operating Expenses 869,771

(Loss) from Operations (403,712)

NON-OPERATING REVENUESFederal Grants - Operating 300,069Federal Grants - Capital 272,423Interest Income and Other Revenue 12,625

585,117Total Non-Operating Revenues

181,405NET INCREASE IN NET ASSETSNET ASSETS, Beginning of Year 2.905.856

NET ASSETS, End of Year 3,087,261

Despite the increase in net assets of these funds, there was a decrease in unrestricted cash by $34,161from fiscal year 2003, primarily due to investment in capital assets and construction in progress of theincrease in net assets plus additional reserved cash.

In future years, a comparative analysis of Authority-wide data with the prior year will be presented. (Acomparative analysis for the current year is not required by accounting standards followed by theAuthority.)


September 30, 2004

Compared with the prior fiscal year, total revenues decreased $90,647, or by 8%. Reasons for thischange are listed below in order of impact from greatest to least:

• A decrease of $149,575 in funding from HUD for operations, minus an increase of $63,218 infunding from HUD for capital projects, for an overall net decrease of 13% in funding from HUDfrom fiscal year 2003. The Housing Authority was still in the process of completing projects fundedfrom grants by HUD for fiscal years 2001 through 2004, and submitted a new grant during fiscalyear 2004.

• Rental revenues increased by $5,671, or by 1 %, despite a decrease in occupancy by 5%. Therewas an increase in tenants during the year having higher incomes that received less in subsidiesand paid more rent from their own funds.

• Interest income decreased by $1,739, or by 38% from fiscal year 2003, due to spending morecash reserves on $381,141 of construction in progress than investing it.

Compared with the prior fiscal year, total expenses increased $27,260, or by 3%. Again, reasons forthis change are listed below in order of impact from greatest to least:

• Depreciation Expense increased by $38,298, or by 21% from the prior year, due to the additionduring 2004 of $43,630 in new capital assets and putting $576,718 of construction in progress intoservice.

• Extraordinary repairs decreased by $26,499, or by 100% from the prior year, because none wereincurred in the current fiscal year.

Administrative expense increased by $20,201, or by 10% from the prior year, due to an increasein salaries and related benefits by 7%, an increase in audit fees by 21 %, and an increase in stafftraining, travel, accounting and legal fees by 18%.

• Utilities cost decreased by $18,949, or by 13% from the prior year, due to decreases inconsumption of electricity by 14%, in gas by 28%, and in sewer and garbage disposal services by6%. The new heating and air conditioning system consumed less energy, and some of thedwelling units were converted over to independent gas distribution.

• Ordinary maintenance and repairs increased by $9,080, or by 5% from the prior year, due to acombination of offsetting factors. Maintenance labor and related benefits decreased by 34%because 3 employees quit during the year, and it was difficult to find immediate full-timereplacements. Consequently, contract labor increased by 73% during the interim. Finally, therewas an increase in materials used by 39%.

• General Expense increased by $5,333, or by 5% from the prior year, due to an increase ininsurance premiums by 11 %, which generally occurred with housing authorities statewide. Inaddition, payments in lieu of taxes increased by 6% because they are computed based on apercentage of rental income minus utilities, and therefore increase proportionally to them.Offsetting these is a decrease in uncollectible rents from vacated tenants by 30% because ofmore aggressive collection policies.



These changes led to an increase in total assets by $166,234 and a decrease in liabilities by $15,171.Capital assets excluding depreciation actually increased by $424,771, to the end that cash decreasedby $150,218. Nonetheless, there are still over $12 of current assets covering each dollar of liability,because there are still $562,071 in investments.

BUDGETARY ANALYSIS

Low Rent Program Budgetary Highlights

The final operating budget for the Low Rent Program approved by HUD for fiscal year ended June 30,2004 showed budgeted revenues exceeding budgeted expenses by $70,203.

The original revenue budget was $847,362 for fiscal year 2004. There were several significantvariations between the budget and the actual revenues, leading to $124,274 less income thanexpected. The factors causing this are listed in order of greatest impact to least:

• Tenant revenues fell below the budget of $590,080 by $124,447 due to overestimation of excessutilities and non-dwelling tenant rentals.

• There were $257,282 of other budgeted items (HUD revenues) that were neither significantly over-nor underspent.

The original proposed expense budget of $875,705 was revised during fiscal year 2004 to $917,565 toinclude increased audit fees, repair materials, contract labor, rental collection losses, and betterments.There were several significant variations between the final adopted annual budget and the actualexpenditures excluding depreciation, leading to $43,094 less expense than budgeted. These factorscausing this are listed in order of greatest impact to least:

' Administrative expenses fell below the budget of $253,800 by $26,819 due to an overestimation ofthe cost of the employee benefits plan.

• Ordinary maintenance and repairs fell below the budget of $205,360 by $25,847 due to loss of 3staff persons that could not be immediately replaced. Also, some of the necessary repairs wereabsorbed by the construction in progress.

• Utilities exceeded the budget of $117,260 by $9,149 due to an overestimation of the potentialsavings from installation of a more energy efficient central heating and air conditioning unit, andconversion of some dwellings to independent distribution of gas.

• General expense exceeded the budget of $113,170 by $2,333 due to overestimation of the amountby which uncollectible rents could be reduced by more aggressive collection policies.

• There was $227,975 budgeted for betterments and tenant services that were neither significantlyover- nor underspent.



CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

At June 30, 2004, the Housing Authority had $8,246,708 invested in a broad range of assets andconstruction in progress from projects funded in 2003, listed below. This amount, not includingdepreciation, represents increases of $424,771 from the prior year. More detailed information aboutcapital assets appears in the notes to the financial statements.

Capital Assets,Net of Accumulated Depreciation

As of September 30, 2004Land $ 296,928Buildings 1,914,243Furniture and Equipment 72,431Leasehold Improvements 101,527Construction in Progress 13,630

Total 2,398,759

As of the end of the 2004 fiscal year, the Authority is still in the process of completing HUD grants of$1,368,549 obtained during 2002 through 2003 fiscal years. A total remainder of $604,723 will bereceived and $590,453 will be spent for completing these projects during fiscal year 2005.

Additional major capital projects of $324,168 were approved for the 2005 fiscal year from a HUD grantsubmitted during fiscal year 2004.

Debt

Long-term debt includes accrued annual vacation and sick leave due to employees. The HousingAuthority has not incurred any mortgages, leases, or bond indentures for financing capital assets oroperations.

10


September 30, 2004

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES

The Housing Authority is primarily dependent upon HUD for the funding of operations; therefore, theHousing Authority is affected more by Federal budget than by local economic conditions. The capitalbudgets for 2005 fiscal year have already been submitted to HUD for approval and no major changes areexpected.

The Capital fund programs are multiple year budgets and have remained relatively stable. Capital Fundsare used for the modernization of public housing properties including administrative fees involved in themodernization.

CONTACTING THE HOUSING AUTHORITY'S FINANCIAL MANAGEMENT

Our financial report is designed to provide our citizens, investors, and creditors with a general overview ofthe Housing Authority's finances, and to show the Housing Authority's accountability for the money itreceives. If you have questions about this report, or wish to request additional financial information,contact Chris Simpson, Executive Director, at the Housing Authority of Rayne, Louisiana; P.O. Box 164;Rayne, LA 70578-0164.

11

HOUSING AUTHORITY OF RAYNEENTERPRISE FUNDS - BALANCE SHEET

YEAR ENDED SEPTEMBER 30, 2004

EXHIBIT A

GeneralASSETSCurrent assets

Cash and cash equivalents $InvestmentsAccounts receivable netInterest receivableInterfund receivablePrepaid items and other assetsInventory

Total Current Assets

Restricted AssetsCash

Capital Assets, netLandBuildings, and equipment (net)

Total Capital Assets, net

Total Assets $

LIABILITIESCurrent Liabilities

Accounts payable $Compensated absences payableInterfund payableAccrued PILOT

Total Current Liabilities

Current Liabilities - payable fromCurrent Restricted Assets -

Deposits due others

Noncurrent LiabilitiesCompensated absences payable

Total Liabilities

NET ASSETSInvested in capital assets, net ofrelated debt

Unrestricted

Net Assets

Total Liabilities and Net Assets $

216,815465,926

2,188118

14,27032,210

9,626

741,153

9,492

296,9281,651,402

1,948,330

2,698,975 $

1,1525,464

031,031

37,647

9,492

15,004

62,143

1,948,330688,502

2,636,832

2,698,975 $

Capital FundProgram

0 $0

14,2700000

14,270

0

0450,429

450,429

464,699 $

0 $0

14,2700

14,270

0

0

14,270

450,4290

450,429

464,699 $

Total

216,815465,926

16,458118

14,27032,210

9,626

755,423

9,492

296,9282,101,831

2,398,759

3,163,674

1,1525,464

14,27031,031

51,917

9,492

15,004

76,413

2,398,759688,502

3,087,261

3,163,674

The Notes to the Financial Statements are an integral part of these statements.12

EXHIBIT BHOUSING AUTHORITY OF RAYNE

ENTERPRISE FUNDS - STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET ASSETS

YEAR ENDED SEPTEMBER 30,2004

OPERATING REVENUESDwelling rentalOther

Total Operating Revenues

OPERATING EXPENSESAdministrationTenant servicesUtilitiesOrdinary maintenance & operationsGeneral expensesDepreciation

Total Operating Expenses

Income (loss) from Operations

Non Operating Revenues (Expenses)Interest earningsFederal grantsLoss on disposal of assets

Total Non-OperatingRevenues (Expenses)

Income (loss) before contributionand transfer

Capital ContributionTransfers inTransfers out

Change in net assets

Total net assets - beginning

Total net assets - ending

General

368,675 $97,384

466,059

226,9802,742

126,410179,513115,504187,422

838,571

(372,512)

12,748244,282

(123)

256,907

Capital FundProgram

0 $0

0

00000

31,200

31,200

(31,200)

0328,210

0

328,210

Total

368,67597,384

466,059

226,9802,742

126,410179,513115,504218,622

869,771

(403,712)

12,748572,492

(123)

585,117

(115,605)

55,7870

(59,818)

2,696,650

2,636,832 $

297,010

055,787

241,223

209,206

450,429 $

181,405

55,78755,787

181,405

2,905,856

3,087,261


HOUSING AUTHORITY OF RAYNEENTERPRISE FUNDS - STATEMENT OF CASH FLOWS

YEAR ENDED SEPTEMBER 30,2004

EXHIBIT C

GeneralCASH FLOWS FROM

OPERATING ACTIVITIESRental receipts $Other receiptsPayments to vendorsPayments to employees - net

Net cash provided (used) byoperating activities

CASH FLOWS FROM NON-CAPITALFINANCING ACTIVITIES

Operating transfers inOperating transfers outFederal grants

Net cash provided (used) by non-capital financing activities

CASH FLOWS FROM CAPITAL ANDRELATED FINANCING ACTIVITIESPurchase of capital assetsFederal Capital Grants

Net cash provided (used) by capitaland related financing activities

CASH FLOWS FROM INVESTINGACTIVITIES

Interest incomePurchase of investments

Net cash provided (used) byinterest income net of purchases

of investment

NET INCREASE (DECREASE) INCASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTSBeginning of Fiscal Year

CASH AND CASH EQUIVALENTSEnd of Fiscal Year $

368,69683,006

(423,244)(232,526)

(204,068)

55,7870

244,282

300,069

(152,472)0

(152,472)

12,710(10,314)

Capital FundProgram

014,270

00

14,270

0(55,787)41,517

(14,270)

(272,423)272,423

2,396

(54,075)

280,382

226,307 $

0

0

0

0

Total

368,69697,276

(423,244)(232,526)

(189,798)

55,787(55,787)285,799

285,799

(424,895)272,423

(152,472)

12,710(10,314)

2396

(54,075)

280,382

226,307

Continued

14

EXHIBIT CHOUSING AUTHORITY OF RAYNE

ENTERPRISE FUNDS - STATEMENT OF CASH FLOWSYEAR ENDED SEPTEMBER 30, 2004

GeneralCapital Fund

ProgramRECONCILIATION OF OPERATING

INCOME (LOSS) TO NET CASHPROVIDED (USED) BY OPERATINGACTIVITIES:

Operating income (loss)Adjustment to reconcile operating

income to net cash provided byoperating activities:

Depreciation ExpenseProvision of uncollectible accounts

Change in assets and liabilities:ReceivablesDue from other fundsInventoriesPrepaid itemsAccount payablesAccrued expensesDue to other funds

Net cash provided by operations

(372,512) $

187,422386

(365)(14,270)

5,4395,003

(16,545)1,374

0

(31,200) $

31,2000

000000

14,270

(204,068) $ 14,270 $

Total

(403,712)

218,622386

(365)(14,270)

5,4395,003

(16,545)1,374

14,270

(189,798)

Concluded


HOUSING AUTHORITY OF RAYNENOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS


INDEX

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 17A. REPORTING ENTITIES 17B. FUNDS 18C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING 18D. CASH AND CASH EQUIVALENTS 19E. INVESTMENTS 19F. SHORT-TERM INTERFUND RECEIVABLES/PAYABLES 20G. INVENTORY 20H. PREPAID ITEMS 20I. CAPITAL ASSETS 20J. DEFERRED REVENUES 21K. COMPENSATED ABSENCES 21L. RESTRICTED NET ASSETS 21M. INTERFUND ACTIVITY 21N. USE OF ESTIMATES 21

NOTE 2 - DEPOSITS AND INVESTMENTS 22NOTE 3 - ACCOUNTS RECEIVABLE 23NOTE 4 - CAPITAL ASSETS 23NOTE 5 - RETIREMENT SYSTEM 24NOTE 6 - ACCOUNTS PAYABLE 24NOTE 7 ~ COMMITMENTS AND CONTINGENCIES 25NOTE 8 - INTERFUND RECEIVABLES AND PAYABLES 25NOTE 9 - COMPENSATED ABSENCES 25NOTE 10 - GENERAL LONG - TERM OBLIGATIONS 25NOTE 11 - INTERFUND TRANSFERS 26

16

HOUSING AUTHORITY OF RAYNENOTES TO THE BASIC FINANCIAL STATEMENTS

SEPTEMBER 30, 2004

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanyingfinancial statements of the Housing Authority have been prepared in conformity with accountingprinciples generally accepted in the United States of America (GAAP) as applied to governmentalunits. The Governmental Accounting Standards Board (GASB) is the accepted standard-settingbody for establishing governmental accounting and financial reporting principles.

A. REPORTING ENTITY Housing Authorities are chartered as public corporations under thelaws (LSA - R.S. 40.391) of the state of Louisiana for the purpose of providing safe and sanitarydwellings accommodations. This creation was contingent upon the local governing body of the cityor parish declaring a need for the Housing Authority to function in such city or parish. The HousingAuthority is governed by a five member Board of Commissioners. The members, appointed by theHonorable Mayor of the City of Rayne, serve staggered multi-year terms.

The Housing Authority has the following units:

PHA Owned Housing FW - 590 200

GASB Statement 14 establishes criteria for determining the governmental reporting entity andcomponent units that should be included within the reporting entity. Under provisions of thisStatement, the Housing Authority is considered a primary government, since it is a special purposegovernment that has a separate governing body, is legally separate, and is fiscally independent ofother state or local governments. As used in GASB Statement 14, fiscally independent means thatthe Housing Authority may, without the approval or consent of another governmental entity,determine or modify its own budget, levy its own taxes or set rates or charges, and issue bondeddebt with HUD approval.

The Housing Authority is a related organization of the City of Rayne since the City of Rayneappoints a voting majority of Housing Authority's governing board. The City of Rayne is notfinancially accountable for the Housing Authority as it cannot impose its will on the HousingAuthority and there is no potential for the Housing Authority to provide financial benefit to, orimpose financial burdens on, the City of Rayne. Accordingly, the Housing Authority is not acomponent unit of the financial reporting entity of the City of Rayne.

Governmental Accounting Standards Board (GASB) Codification Section 2100 establishes criteriafor determining which, if any, component units should be considered part of the Housing Authorityfor financial reporting purposes. The basic criteria for including a potential component unit withinthe reporting entity is financial accountability. The GASB has set forth criteria to be considered indetermining financial accountability, which includes:

17


SEPTEMBER 30, 2004

1) Appointing a voting majority of an organization's governing body, and:

a) The ability of the government to impose its will on that organization and/or

b) The potential for the organization to provide specific financial benefits to or imposespecific financial burdens on the government.

2) Organizations for which the government does not appoint a voting majority but are fiscallydependent on the government.

3) Organizations for which the reporting entity financial statements would be misleading if dataof the organization is not included because of the nature or significance of the relationship.

Based on the previous criteria, the Housing Authority has determined that there are no componentunits that should be considered as part of the Housing Authority reporting entity.

B. FUNDS The accounts of the Housing Authority are organized and operated on the basis offunds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts.Fund accounting segregates funds according to their intended purpose and is used to aidmanagement in demonstrating compliance with finance-related legal and contractual provisions.The minimum number of funds are maintained consistent with legal and managerial requirements.

All funds of the Housing Authority are classified as proprietary. The general fund accounts for thetransactions of the public housing Low Rent program, the Drug Elimination program and theCapital Fund program. The Housing Choice Voucher Fund accounts for the Section 8 HousingChoice Voucher programs. The Capital Funding program accounts for Capital Funding grants.

C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING

New Accounting Standards Adopted During the year ended September 30, 2004, the Authorityadopted three new statements of financial accounting standards issued by the GovernmentAccounting Standards Board (GASB):

• Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis -for State and Local Governments.

• Statement No. 37, Basic Financial Statements - and Management's Discussion and Analysis -for State and Local Governments: Ominous, an amendment of GASB Statements No. 21 and 34.

• Statement No. 38, Certain Financial Statement Note Disclosures.

18


SEPTEMBER 30, 2004

Statement No. 34 (as amended by Statement No.37) represents a very significant change in thefinancial reporting model used by state and local governments including special purposegovernments such as the Housing Authority of the City of Rayne. This new reporting modelrequires management to provide a narrative and analysis to the ordinary user called theManagement's Discussion and Analysis (MD&A). This new reporting model also requires thefinancial statements to be presented on the entity as a whole (government-wide financialstatements). The most significant changes to the financial statements are the format, classificationof information and the classification of fund equity into various classes of net assets.

PROPRIETARY FUNDS Proprietary funds are accounted for on the flow of economic resourcesmeasurement focus and the accrual basis of accounting. Under this method, revenues are recordedwhen earned and expenses are recorded at the time the liabilities are incurred. With thismeasurement focus, all assets and all liabilities associated with the operation of these funds areincluded on the balance sheet. The Housing Authority has elected, pursuant to GASB StatementNo. 20, to apply all GASB pronouncements and only FASB pronouncements issued beforeNovember 13, 1989.

Proprietary funds distinguish operating revenues and expenses from non-operating items.Operating revenues and expenses generally result from providing services and producing anddelivering goods in connection with a proprietary funds' principal ongoing operations. Theprincipal operating revenues of the Housing Authority's funds are rent and maintenance charges toresidents and administration fees earned. Operating expenses for proprietary funds include theadministrative costs of providing the service and the housing assistance payments to residents. Allrevenues and expenses not meeting this definition are reported as non-operating revenues andexpenses.

D. CASH AND CASH EQUIVALENTS Cash includes amounts in demand deposits and interest-bearing demand deposits. Cash equivalents include amounts in time deposits and cash with fiscalagent. Under state law, the Housing Authority may deposit funds in demand deposits, interest-bearing demand deposits, money market accounts, or time deposits with state banks organizedunder Louisiana law and national banks having their principal offices in Louisiana.

E. INVESTMENTS Investments are limited to L.S.-R.S. 33:2955 and the Housing Authority'sinvestment policy. If the original maturities of investments exceed 90 days, they are classified asinvestments; however, if the original maturities are 90 days or less, they are classified as cashequivalents.

The investments are reflected at quoted market prices except for the following which arerequired/permitted as per GASB Statement No. 31:

19


SEPTEMBER 30, 2004

Investments in nonparticipatins interest-earning contracts, such as nonnegotiable certificatesof deposit with redemption terms that do not consider market rates, are reported using acost-based measure.

The Housing Authority reported at amortized cost money market investments participatinginterest-earning investment contracts that have a remaining maturity at time of purchase ofone year or less.

Definitions:

Interest-earning investment contract include time deposits with financial institutions (such ascertificates of deposit), repurchase agreements, and guaranteed investment contracts.

Money market investments are short-term, highly liquid debt instruments that include U.S.Treasury obligations.

F. SHORT - TERM INTERFUND RECEIVABLES/PAYABLES During the course ofoperations, numerous transactions occur between individual funds for services rendered. Thesereceivables and payables are classified as due from other funds or due to other funds on the balancesheet. Short-term interfund loans are classified as interfund receivables/payables.

G. INVENTORY All purchased inventory items are valued at cost using first-in, first-out method.Acquisition of materials and supplies are accounted for on the consumption method, that is, theexpenses are charged when the items are consumed.

H. PREPAID ITEMS Certain payments to vendors reflect costs applicable to future accountingperiods and are recorded as prepaid items.

I. CAPITAL ASSETS Capital assets are recorded at historical cost and depreciated over theirestimated useful lives (excluding salvage value). The capitalization threshold is $300.00. Donatedcapital assets are recorded at their estimated fair value at the date of donation. Estimated useful liveis management's estimate of how long the asset is expected to meet service demands. Straight linedepreciation is used based on the following estimated useful lives:

Site improvements 15 yearsBuildings 33 yearsBuilding improvements 15 yearsFurniture and equipment 5-7 yearsComputers 3 years

General infrastructure assets acquired prior to July 1, 2003, are not reported in the basic financialstatements. General infrastructure assets include all roads, bridges, sidewalks, and otherinfrastructure assets acquired subsequent to July 1, 2003.

20


SEPTEMBER 30, 2004

J. DEFERRED REVENUES The Housing Authority reports deferred revenues on its balancesheet. Deferred revenues arise when resources are received by the Housing Authority before it hasa legal claim to them, as when grant monies are received prior to the occurrence of qualifyingexpenditures. In subsequent periods, when the Housing Authority has a legal claim to theresources, the liability for deferred revenue is removed from the balance sheet and the revenue isrecognized.

K. COMPENSATED ABSENCES The Housing Authority follows Louisiana Civil Serviceregulations for accumulated annual and sick leave. Employees may accumulate up to three hundredhours of annual leave which may be received upon termination or retirement. Sick leave hoursaccumulate, but the employee is not paid for them if not used by his/her retirement or terminationdate.

L. RESTRICTED NET ASSETS Net assets are reported as restricted when constraints placed onnet asset use are either:

Externally imposed by creditors (such as debt covenants), grantors, contributors, or laws orregulations of other governments or imposed by law through constitutional provisions or enablinglegislation.

Restricted resources are used first when an expense is incurred for purposes for which bothrestricted and unrestricted net assets are available.

M. INTERFUND ACTIVITY Interfund activity is reported as either loans, services provided,reimbursements or transfers. Loans are reported as interfund receivables and payables asappropriate. Services provided, deemed to be at market or near market rates, are treated as revenuesand expenses.

All other interfund transfers are reported as operating transfers. Reimbursements are when one fundincurs cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement.All other interfund transactions are treated as transfers.

N. USE OF ESTIMATES The preparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements and the reported amounts ofrevenues, expenses and other financing sources and uses during the reporting period. Actual resultscould differ from those estimates.

21


SEPTEMBER 30, 2004

NOTE 2 - DEPOSITS AND INVESTMENTS Both cash deposits and investments held at afinancial institution can be categorized according to three levels of risk. These three levels of riskare:

Category 1 - Insured or collateralized with securities held by the entity or by its agent in theentity's name

Category 2 - Collateralized with securities held by the pledging financial institution's trustdepartment or agent in the entity's name

Category 3 - Uninsured and unregistered investments held by the counter-party, its trustdepartment, or its agent, but not in the Authority's name

At September 30, 2004 the Housing Authority has Cash equivalents, and investments totaling$692,233 as follows:

Cash on hand $ 50Demand deposits (4,636)Interest-bearing demand deposits 230,893Time deposits 465,926

Total $ 692,233

Cash and cash equivalents $ 216,815Cash and cash equivalents - restricted 9,492Investments 465,926

Total $ 692,233

Deposits are stated at cost, which approximates fair value.

Under state law, these deposits (or the resulting bank balances) must be secured by federal depositinsurance or the pledge of securities owned by the fiscal agent bank. The fair value of the pledgedsecurities plus the federal deposit insurance must at all times equal the amount on deposit with thefiscal agent. These securities are held in the name of the pledging fiscal agent bank in a holding orcustodial bank that is mutually acceptable to both parties. At September 30, 2004, the HousingAuthority's carrying amount of deposits was $692,813 and the bank balance was $733,309. Of thebank balance, $100,000 was covered by federal depository insurance (GASB Category 1). Theremaining $633,309 was collateralized with securities held by the pledging financial institution'strust department or agent but not in the Housing Authority's name (GASB Category 3).

22


SEPTEMBER 30, 2004

Even though the pledged securities are considered uncollateralized (Category 3) under theprovisions of GASB Statement #3, Louisiana Revised Statute 39.1229 imposes a statutoryrequirement on the custodial bank to advertise and sell the pledged securities within 10 days ofbeing notified by the Housing Authority that the fiscal agent has failed to pay deposited funds upondemand.

Investments during the year were solely in time deposits at banks.

NOTE 3 - ACCOUNTS RECEIVABLE The receivables at September 30, 2004, are as follows:

General TotalClass of ReceivablesLocal sources:

Tenants $ 2,188 $ 2,188Other 0 0

Federal sources:Grants 14,270 14,270

Total $ 16,458 $ 16,458

The tenants account receivable is net of an allowance for doubtful accounts of $386.00.

NOTE 4 - CAPITAL ASSETS The changes in capital assets are as follows:

Balance Balance09/30/03 Additions Deletions 09/30/04

Land $ 296,928 $ 0 $ 0 $ 296,928Buildings 7,223,143 368,811 0 7,591,954Furniture and equipment 330,690 42,455 28,948 344,197Construction in progress 0 13,629 0 13,629

Total 7,850,761 424,895 28,948 8,246,708Less: accumulated depreciation

Buildings 5,403,643 172,306 0 5,575,949Furniture and equipment 254,509 46,316 28,825 272,000

Total 5,658-152 218,622 28,825 5,847,949

Fixed assets, net $ 2,192,609 $ 206,273 $ 123 $ 2,398,759

23


SEPTEMBER 30, 2004

NOTE 5 - RETIREMENT SYSTEM The Housing Authority participates in the Housing -Renewal and Local Agency Retirement Plan, administered by Broussard, Bush & Hurst, which is adefined contribution plan. The plan consists of employees of various local and regional housingauthorities, urban renewal agencies, and other similar organizations. Through this plan, theHousing Authority provides pension benefits for all of its full-time employees. All regular and full-time employees are eligible to participate in the plan on the first day of the month after completingone month of continuous and uninterrupted employment. Plan provisions and changes to plancontributions are determined by the Board of the Housing Authority.

Under a defined contribution plan, benefits depend solely on amounts contributed to the plan plusinvestment earnings. The employer is required to make monthly contributions equal to a minimumof 14-1/2% percent of each participant's basic (excludes overtime) compensation. This paymentrepresents a 6% contribution by the employee, plus additional voluntary contributions, and an 8-1/2% contribution by the Housing Authority.

The Housing Authority's contribution for each employee and income allocated to the employee'saccount are fully vested after five years of continuous service. Housing Authority's contributionsand interest forfeited by employees who leave employment before five years of service are used tooffset future contributions of the Housing Authority. Normal retirement date shall be the first dayof the month following the employee's 65th birthday or after 10 years of participation in the plan.

The Housing Authority's contributions were calculated using the base salary amount of $160,733.The Housing Authority made the required contributions of $25,843 for the year ended September30, 2004, of which $12,569 was paid by the Housing Authority and $13,274 was paid byemployees. No payments were made out of the forfeiture account.

NOTE 6 - ACCOUNTS PAYABLE The payables at September 30, 2004 are as follows:

General Total

Payroll taxes &Retirement withheld $ 1,152 $ 1,152

Total $ 1,152 $ 1,152

24


SEPTEMBER 30, 2004

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Litigation The Housing Authority is not presently involved in litigation.

Grant Disallowances The Housing Authority participates in a number of state and federallyassisted grant programs. The programs are subject to compliance audits under the single auditapproach. Such audits could lead to requests for reimbursement by the grantor agency forexpenditures disallowed under terms of the grants. Housing Authority management believes thatthe amount of disallowance, if any, which may arise from future audits will not be material.

Construction Projects There are certain renovation or construction projects in progress atSeptember 30, 2004. These include modernizing rental units. These projects are being funded byHUD. Funds are requested periodically as the cost is incurred.

Risk Management The Housing Authority is exposed to various risks of loss related to torts; theftof, damage to and destruction of assets; errors and omissions; and natural disasters for which theHousing Authority carries commercial insurance.

NOTE 8 - INTERFUND RECEIVABLES / PAYABLES Interfund receivables / payables atSeptember 30, 2004 are as follows:At 09/30/04, the Capital Fund Program owed $14,270 to the Low Rent Program.

NOTE 9 - COMPENSATED ABSENCES At September 30, 2004, employees of the HousingAuthority have accumulated and vested $20,468 of employee leave computed in accordance withGASB, Codification Section C60.

NOTE 10 - GENERAL LONG - TERM OBLIGATIONS The following is a summary of thelong - term obligation transactions for the year ended September 30, 2004.

CompensatedAbsences

Balance, beginning $ 19,056Additions 2,823Deductions 1,411Balance, ending 20,468

Amounts due in one year $ 5,464

25


SEPTEMBER 30, 2004

NOTE 11 - INTERFUND TRANSFERS Interfund transfers for the year September 30,2004consists of the following:

Transfer To Transfer From

Low Rent Capital Fund

The Capital Fund grant provisions allowed the PHA to transfer $55,787 to the Low Rent program topay for eligible Low Rent expenses and to also increase the operating reserve.

26

SUPPLEMENTARY INFORMATION

EXHIBIT E(l)

HOUSING AUTHORITY OF RAYNESTATEMENT AND CERTIFICATION OF ACTUAL MODERNIZATION COST

ANNUAL CONTRIBUTION CONTRACT


1. The Actual Modernization Costs are as follows:

2001 2003Capital Fund Capital Fund

Funds approved $ 358,720 $ 55,787

Funds expended 358,720 55,787

Excess of funds approved $ 0 $ 0

Funds advanced $ 358,720 $ 55,787

Funds expended 358,720 55,787

Excess of funds advanced $ 0 $ 0

2. The distribution of costs by project as shown on the Final Statements ofModernization Costs both dated March 23, 2004, and accompanying the ActualModernization Costs Certificates submitted to HUD for approval are in agreementwith the PHA's records.

3. All modernization costs have been paid and all related liabilities have beendischarged through payment.

See accountants' report27

EXHIBIT E(2)

HOUSING AUTHORITY OF RAYNESTATEMENT OF MODERNIZATION COSTS - UNCOMPLETED


CASH BASIS

Funds approved

Funds expended

Excess of funds approved

2002Capital Fund

350,410 $

350,410

0 $

2003Capital Fund

279,914

13,629

266,285

Funds advanced

Funds expended

Excess of funds advanced

348,769 $

350,410

(1,641) $

1,000

13,629

(12,629)

28

MIKE ESTES, P.C.A PROFESSIONAL ACCOUNTING CORPORATION


(817)831-3553METRO (817) 654-4063

(817) 831 -3560 MEMBER AMERICANMIKE H,rre.r, CPA e-mail: [email protected] INSTITURE OF CERTIFIED

PUBLIC ACCOUNTANTS

Report on Compliance with Requirements Applicable to EachMajor Program and Internal Control Over Compliance in

Accordance with OMB Circular A-133

Housing Authority of RayneRayne, Louisiana

We have audited the compliance of the Housing Authority of Rayne, Louisiana with the types ofcompliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the yearended September 30, 2004. The Housing Authority of Rayne, Louisiana's major federal programs areidentified in the summary of auditor's results section of the accompanying schedule of findings andquestioned costs. Compliance with the requirements of laws, regulations, contracts and grantsapplicable to each of its major federal programs is the responsibility of the Housing Authority ofRayne, Louisiana's Management. Our responsibility is to express an opinion on the Housing Authorityof Rayne, Louisiana's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in theUnited States of America, and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMBCircular A-133 require that we plan and perform the audit to obtain reasonable assurance aboutwhether noncompliance with the types of compliance requirements referred to above that could have adirect and material effect on a major federal program occurred. An audit includes examining, on a testbasis, evidence about the Housing Authority of Rayne, Louisiana's compliance with those requirementsand performing such other procedures as we consider necessary in the circumstances. We believe thatour audit provides a reasonable basis for our opinion. Our audit does not provide a legal determinationon the Housing Authority of Rayne, Louisiana's compliance with those requirements.

In our opinion, the Housing Authority of Rayne, Louisiana complied, in all material respects, with therequirements referred to above that are applicable to each of its major federal programs for the yearended September 30, 2004.

29

Internal Control Over Compliance

The management of The Housing Authority of Rayne, Louisiana is responsible for establishing andmaintaining internal control over compliance with requirements of laws, regulations, contracts andgrants applicable to federal programs. In planning and performing our audit, we considered theHousing Authority of Rayne, Louisiana's internal control over compliance with requirements thatcould have a direct and material effect on a major federal program in order to determine our auditingprocedures for the purpose of expressing our opinion on compliance and to test and report on internalcontrol over compliance in accordance with OMB Circular A-13 3.

Our consideration of the internal control over compliance would not necessarily disclose all matters inthe internal control that might be material weaknesses. A material weakness is a condition in whichthe design or operation of one or more of the internal control components does not reduce to arelatively low level the risk that noncompliance with applicable requirements of laws, regulations,contracts and grants that would be material in relation to a major federal program being audited mayoccur and not be detected within a timely period by employees in the normal course of performingtheir assigned functions. We noted no matters involving the internal control over compliance and itsoperation that we consider to be material weaknesses.

This report is intended for the information of the audit committee, management, federal awardingagencies and pass-through entities and is not intended to be and should not be used by anyone otherthan the specified parties. Under state Revised Statute 24:513, this report is distributed by theLegislative Auditor as a public document.

Mike Estes, P.C.Fort Worth, TexasJanuary 14, 2005

30

MIKE ESTES, P.C.A PROFESSIONAL ACCOUNTING CORPORATION


(817)831-3553METRO (817) 654-4063

(817) 831-3560 MEMBER AMERICAN

MIKE ESTES, CPA e-mail: [email protected] INSTITURE OF CERTIFIEDPUBLIC ACCOUNTANTS

Report on Internal Control Over Financial Reporting and on Compliance andOther Matters Based on an Audit of Financial Statements Performed in

Accordance with Governmental Auditing Standards

Housing Authority of RayneRayne, Louisiana

We have audited the financial statements of the business-type activities, each major fund, and theaggregate remaining fund information of the Housing Authority of the City of Rayne, Louisiana as ofand for the year ended September 30, 2004, which collectively comprise the Housing Authority of theCity of Rayne, Louisiana's, basic financial statements and have issued our report thereon dated January14, 2005. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the Housing Authority of the City of Rayne,Louisiana's internal control over financial reporting in order to determine our auditing procedures forthe purpose of expressing our opinions on the financial statements and not to provide an opinion on theinternal control over financial reporting. Our consideration of the internal control would notnecessarily disclose all matters in the internal control over financial reporting that might be materialweaknesses. A material weakness is a reportable condition in which the design or operation of one ormore of the internal control components does not reduce to a relatively low level the risk thatmisstatements caused by error or fraud in amounts that would be material in relation to the financialstatements being audited may occur and not be detected within a timely period by employees in thenormal course of performing their assigned functions. We noted no matters involving the internalcontrol over financial reporting and its operation that we consider to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Housing Authority of the City of Rayne'sfinancial statements are free of material misstatement, we performed tests of its compliance withcertain provisions of laws, regulations, contracts, and grant agreements, noncompliance with whichcould have a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit, andaccordingly, we do not express such an opinion. The results of our tests disclosed no instances ofnoncompliance or other matters that are required to be reported under Government Auditing Standards.

31

This report is intended for the information of the audit committee, management, federal awardingagencies and pass-through entities and is not intended to be and should not be used by anyone otherthan the specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by theLegislative Auditor as a public document.

Mike Estes, P. C.Fort Worth, TexasJanuary 14, 2005

32

HOUSING AUTHORITY OF RAYNESTATEMENT OF EXPENDITURES OF FEDERAL AWARDS


FEDERAL GRANTOR CDFA PROGRAMPROGRAM TITLE NO. EXPENDITURES

U. S. Department of Housing and Urban DevelopmentDirect Programs:

Low-Income Housing Operating Subsidy 14.850 244,282

Public Housing Capital Fund 14.872 328,210

Total United States Departmentof Housing and Urban Development $ 572,492

Total Expenditures of Federal Awards $ 572,492

33

HOUSING AUTHORITY OF RAYNENOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


NOTE 1 - GENERAL The accompanying Schedule of Expenditures of Federal Awardspresents the activity of all federal awards programs of the Housing Authority of Rayne,Louisiana (the "Housing Authority"). The Housing Authority reporting entity is defined in note1(A) to the Housing Authority's general-purpose financial statements. Federal awards receiveddirectly from federal agencies, as well as federal awards passed through other governmentagencies, is included on the schedule.

NOTE 2 - BASIS OF ACCOUNTING The accompanying Schedule of Expenditures ofFederal Awards is presented using the accrual basis of accounting, which is described in note1(C) to the Housing Authority's general-purpose financial statements.

NOTE 3 - RELATIONSHIP TO GENERAL-PURPOSE FINANCIAL STATEMENTSFederal awards revenues are reported in the Housing Authority's general-purpose financialstatements as follows:

Federal SourcesEnterprise funds:

Public Housing $ 244,282Capital Fund 328,210

Total $ 572,492

NOTE 4 - RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Amounts reported inthe accompanying schedule agree with the amounts reported in the related federal financialreports except for changes made to reflect amounts in accordance with generally acceptedaccounting principles.

NOTE 5 - MAJOR FEDERAL AWARDS PROGRAMS The dollar threshold of $300,000was used to distinguish between Type A and Type B federal programs. For those funds that havematching revenues and state funding, federal expenditures were determined by deductingmatching revenues from total expenditures. In accordance with HUD Notice PIH 98-14, "federalawards" do not include Housing Authority operating income from rents or investments (or othernon-federal sources). In addition, debt service annual contribution payments made by HUDdirectly to fiscal agents for holders of Housing Authority bonds or for Housing Authority notesheld by the federal financing bank (FFB), are not considered when determining if the SingleAudit Act "federal awards expended" threshold is met by the Housing Authority in a fiscal year.In addition, the entire amount of operating subsidy received during the fiscal year is consideredto be "expended" during the fiscal year.

34

HOUSING AUTHORITY OF RAYNESCHEDULE OF FINDINGS AND QUESTIONED COSTS


Financial Statement Audit

i. The type of audit report issued was unqualified.

ii. There were no reportable conditions required to be disclosed by Government AuditingStandards issued by the Comptroller General of the United States.

iii. There were no instances of noncompliance considered material, as defined by theGovernment Auditing Standards to the financial statements.

Audit of Federal Awards

iv. There were no reportable conditions required to be disclosed by OMB Circular No. A-133.

v. The type of report the auditor issued on compliance for major programs was unqualified.

vi. The audit disclosed no audit findings which the auditor is required to report under OMBCircular No. A-133, Section .510(a).

vii. The major federal programs are:

CFDA# 14.850 Public and Indian Housing - Low Rent Program

viii. The dollar threshold used to distinguish between Type A and Type B programs asdescribed in OMB Circular No. A-133, Section .520(b) was 300,000.

ix. The auditee qualifies as a low-risk auditee under OMB Circular No. A-133, Section .530.

35

HOUSING AUTHORITY OF RAYNESCHEDULE OF FINDINGS AND QUESTIONED COSTS


Prior Audit Findings and Questioned Costs

The prior audit report contained the following audit findings:

Finding 03-01 - Tenant FilesWe noted that the personnel overall did a good job in tenant file maintenance. However, wenoted that of the ten files we reviewed, income was verified by telephone in two instances, andby telephone in the other.

HUD requires that income be verified in writing with a third party if possible.

On March 9, 2004, HUD issued Notice PIH 2004-1 that gave verification guidance.

We recommend the PHA revise its Admissions and Continued Occupancy Policy regardingincome verification. We also recommend that the PHA perform quality control reviews.

In the current year, no exceptions of income verification were noted in one review of tenant files.The PHA revised its ACOP for income verification preferences. The PHA documented itsquality control checks. This finding is cleared.

Current Audit Findings

Entity-wide or program/department specific

None

36

PHA: LA028 FYED: 09/30/2004

Line Item No.111114100' •"-•--=11

122126126.1126.2129nirt "

v"

120 .r '

131142143143.1144150 " ~iH=

161162163164165

Account Description

Cash - UnrestrictedCash - Tenant Security DepositsFfjifffl|i|5Hlln ^ i - - iji?^ ."Î^Tf^ "^ • ^™ " - ' ' ^^F^rrEsTC^ ^"ZT£

Low Rent Public Housing

£216,815£9,492E|J#!lfiP5ifW' :•• riT ^K^SH1- ^

Accounts Receivable - HUD Other Projects |$0Accounts Receivable - Tenants - Dwelling RentsAllowance for Doubtful Accounts - Dwelling RentsAllowance for Doubtful Accounts - OtherAccrued Interest Receivable

ro(a>TOag0li5iBgK)Mne*ft£(H9B^Braft- ,JiSl!

Investments - Unrestricted

$2,574$-386EO£116(KJB*lAft i; £=i B&, OUD ~;;== ^ ; .

$465,926Prepaid Expenses and Other Assets j$32,210Inventories $9,626Allowance for Obsolete Inventoriesnterprogram Due From

-^€¥J •. " ' . _ - ' : •

LandBuildingsFurniture, Equipment & Machinery - DwellingsFurniture, Equipment & Machinery - AdministrationLeasehold Improvements

$0$14,270

tT-ililli?""- "

$296,928$6,207L306$132,213$212,224$916,408

1 66 jAccumulated Depreciation |$-5,81 6,749167160

160

ISO

Construction In Progressfotal Fixed Assets, rSEÂt i™t*^peprw3a«onr: : :

total Non-Cuirem Assets . ;-:;:.. -; 3.. ..4

$0$11948,330

« t > |iH *y*f\l£*ta™>tWvU

iQtaUssete-,.. >%L . •-:=-•• :-..->_ . JSIi698,975 rs.v:>:;.:.. -

Public Housing Capital FundProgramSO$0

514,27050EO5050tlA 27ft=.™, ^"-t - -"£"J™EE™E

50$0

$0$0$0

t4,smi: , ..^T.--" ••?-•

$0$468,000$0$0$0$-31,200E 13,629&5fi&2&' " '-' ' ••-:-='~:

il ffWiTT^Sr " , - **î"

50,4»- • . - : - 4 r -

H64js»^ ; :

Total5216,81559,492

Sffl ffiMi;-:: - ,; -

514,27052,5745-366505118lilllilllE;"'- - -: :-p

5465,926£32,210$9,626$0$14,270tTfUa-fR ~i£**xi**3f»*

$296,928$6.675,306$132,213$212,224$916,408$-5,847,949>1 3,629KP*CWi7<Wn£f£KO<br4£!h/0

!2|39&?59

[3,163,674

: LA028 F/ED: 09/30/2004

Line Item No.321322333341347

310 ' - ,4

354

Account Description

Accrued Wage/Payroll Taxes PayableAccrued Compensated Absences - Current PortionAccounts Payable - Other GovernmentTenant Security DepositsInterprogram Due To

SHfi3ff9&JBbtav~- . _<_:£>:.. - - •' '-i.^F -:••' :

Accrued Compensated Absences - Non Current&5Q "--"|TI |fel frantLia«ies - -;::: " :;-- . - - . - - . • • -

]300

£08 ...

508.1Si

511.1512.1

TotattlaBiinies :

TotateoritributedieapKal . ..;..-•"

nvested in Capital Assets, Net of Related DebtTotal Reserved Fund Balance ,

Restricted Net AssetsUnrestricted Net Assets

513---;,.~..:.:iIiltSlfmatAsseB _. ." -.-;:--i. .... ;....:-' ""^f

600 'ffcrtal Liabilities and Equity/Net Assets , - , .

_ow Rent Public Housing

$1,152

Public Housing Capital FundProgram$0

55,464 }$0$31,03159,49250547,139

515,004

$0$0514,270514,270 ':„ - '-.§3"."--z-

50515,004 ...... ISO

562,143

» - . - • '

$1,948,33050

$0$688,50282-636,832 , .: ;

$2,698,975

$14,270 .

$0 - . ' ' ,, • '£:

$450,429(0 " ?T "" "

$0$0$450,429 ; . :T;

$464,699

Total$1,152$5,464$31,031$9,492$14,270$61*409

$15,004$15,004

$76.413

5O ;

$2,398,75950

$0$688,502$3,087,261

$3,163,674

37

PHA: LA028 FYED: 09/30/2004

Line Item No. Account Description703 |Net Tenant Rental Revenue704705 j

706706.1

Tenant Revenue - Other

RWfcnnf •• --"-ii • €Ili-. ' -:- '"--'-- .-<••

HUD PHA Operating Grants


$368,675(96,959#J*B'-J3*aa ' - ^s .=r.iJi'"£sRWrtSlM^*-, ' ^Ti—Er '

$244,282

Public Housing Capital FundProgram50(0

555,787

Capital Grants |$0 §272.423711 (Investment Income - Unrestricted j$12,748 j$0715 JOther Revenue71 6 |Gain/Loss on Sale of Fixed Assets^QQ:j:-"--i"3=^g^^m^;s~--- ^ . .jflllj.- ... -.-.;• . -^ .-:?§.==£•=

$425 ISO$-123E7229W i ^MJ

$05328iSO|5===- . ,--v*j^js~-

Total£368,675(96,959

llHBsW' " s.f sf s™.

£300,069$272,423$12,748$425$-123H, 0511476V:.

PHA: LA028 F/ED: 09/30/2004

t' ine Item No.11

912914915916924931932933938941942943945961963964 : ,969 1

970

974SOOMl

1001

110021010-. T :j

1000 .

Account DescriptionAdministrative SalariesAuditing FeesCompensated AbsencesEmployee Benefit Contributions - AdministrativeOther Operating - AdministrativeTenant Services - OtherWaterElectricityGasOther Utilities ExpenseOrdinary Maintenance and Operations - LaborOrdinary Maintenance and Operations - Materials and OtherOrdinary Maintenance and Operations - Contract CostsEmployee Benefit Contributions - Ordinary MaintenanceInsurance PremiumsPayments in Lieu of TaxesBad Debt - Tenant Rents

Excess C riiliipnue ovw Operating Expenses

Depreciation Expense

Total Expenses =Sr

Operating Transfers InOperating Transfers OutTotal Other Financing SourpBiiUaes) _„> „

Excess (Deficiency) of Operating Revenue Over (Under) Expenses


$113,433$5,500$1,411$55,550$51,086$2,742$8,788$86,548$7,462$23,612$42,630$46,494$69.513$20,876$75,500$31,031$8,973iH!|f49 ..:;;•

$11.817 ^fc.

$187,422»571 ;-? :- 1

$55,787$0S55.787 :•;.--. >

$-59,818 ..

Public Housing CapitalFund Program$0SOSO$0$0 _j$0$0$0$0$0$0$0$0$0$0$0$0t/V ," " ' ~===£JL,

$32^210 ,~Ls^r- ^ivf

$31,200E3fv200 " v" ^ ^ ' ^^==-™

$0$-55,787$-55,787.. - ; j-s

$241,223 . . ..j. :

Total$113,433$5,500$1,411$55,550$51,086$2,742$8,788$86,548$7,462$23,612$42,630$46,494$69,513$20,876$75,500531,03158,973E65i||4Sf

WOJ.027

$218,622

5 191771

$^J87__$-55,787KJ?r-:- -•

1181,405

PHA: LA028 FYED: 09/30/2004

Line Item No.. tn ... Low Rent Public Housing Public Housing Capital FundAccount Descnption a Program

1 1 02 JDebt Principal Payments - Enterprise Funds f$0 ]$011031120

Beginning Equity J$2,696,650 {$209,206Unit Months Available |2,281 {0

TotalSO$2,905,8562,281

il21 JNumber of Unit Months Leased |2,225 |0 |2,225

38

housing authority of rayneapp1.lla.la.gov/publicreports.nsf/5cf759eb5abe1cd... · $576,718 of...

Documents